Car tax, also known as vehicle excise duty (VED) or road tax, is an annual tax paid by drivers in the UK. There are several different factors that determine whether you are required to pay car tax or not, and if so, how much. There are also numerous vehicle tax bands used to calculate the fee that is owed.
This article will specify which tax band your vehicle belongs in and the rates you are subsequently required to pay.
Do I need to pay tax on my car?
The majority of vehicles that drive on public roads in the UK should be taxed – but there are a few exceptions.
Some vehicles are eligible for tax exemption, such as:
- Vehicles used by a disabled person
- Disabled passenger vehicles
- Mobility scooters, powered wheelchairs and invalid carriages
- Historic vehicles
- Electric vehicles under £40,000
- Mowing machines
- Steam vehicles
- Vehicles used for agriculture, horticulture and forestry
If a car is currently not in use, it will still need to be taxed unless it is declared as SORN with the DVLA.
How is car tax calculated?
The amount of car tax you need to pay depends on variables such as CO2 emissions, fuel type and engine size. As previously stated, electric vehicles are exempt, but hybrids are not. However, they may have a lower tax expense as they emit less emissions than petrol or diesel cars.
One of the biggest factors in determining the price of tax is the vehicle’s age – referring specifically to when it was registered. The DVLA car tax rates come in two forms: a first year rate followed by a standard rate. Emissions figures or engine size and the vehicle’s registry date will determine how much you will pay.
Car tax changes happen frequently and first year tax was introduced in 2010 as a way to encourage more environmentally friendly vehicles. If you bought a newly registered car between April 2010 and 2017, you will be subject to this tax.
The government provides data and tools to help calculate your VED.
Current car tax bands
The government has established VED bands that relate to the emissions released by the vehicles. Vehicle tax bands are then referenced against the age of the car to determine the total annual cost. Prior to 1st March 2001, car tax was determined by the size of the engine, as data on CO2 emissions was not as accessible.
Vehicles registered before 1st March 2001
| Engine size | Up to March 2001 rate | 2019/20 rate |
|---|---|---|
| Up to 1,549cc | £155 | £160 |
| Over 1,549cc | £255 | £265 |
Vehicles registered between 1st March 2001 and 1st April 2017
| VED band | CO2 emissions (g/km) | 2015/16 First year rate | 2015/16 Standard rate | 2016/17 First year rate | 2016/17 Standard rate | 2017/18 Standard rate | 2018/19 Standard rate | 2019/20 Standard rate |
|---|---|---|---|---|---|---|---|---|
| A | Up to 100 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| B | 101-110 | 0 | £20 | 0 | £20 | £20 | £20 | £20 |
| C | 111-120 | 0 | £30 | 0 | £30 | £30 | £30 | £30 |
| D | 121-130 | 0 | £110 | 0 | £110 | £115 | £120 | £125 |
| E | 131-140 | £130 | £130 | £130 | £130 | £135 | £140 | £145 |
| F | 141-150 | £145 | £145 | £145 | £145 | £150 | £155 | £160 |
| G | 151-165 | £180 | £180 | £185 | £185 | £190 | £195 | £200 |
| H | 166-175 | £295 | £205 | £300 | £210 | £220 | £230 | £235 |
| I | 176-185 | £350 | £225 | £355 | £230 | £240 | £250 | £260 |
| J | 186-200 | £490 | £265 | £500 | £270 | £280 | £290 | £300 |
| K | 201-225 | £640 | £290 | £650 | £295 | £305 | £315 | £325 |
| L | 226-255 | £870 | £490 | £885 | £500 | £520 | £540 | £555 |
| M | Over 255 | £1,100 | £505 | £1,120 | £515 | £535 | £555 | £570 |
Vehicles registered on or after 1st April 2017
| VED band | CO2 emissions (g/km) | Up to April 2019 First year rate | Up to April 2019 Standard rate | April 2019 First year rate | April 2019 Standard rate |
|---|---|---|---|---|---|
| A | 0 | 0 | 0 | 0 | 0 |
| B | 1-50 | £10 | £140 | £10 | £145 |
| C | 51-75 | £25 | £140 | £25 | £145 |
| D | 76-90 | £105 | £140 | £110 | £145 |
| E | 91-100 | £125 | £140 | £130 | £145 |
| F | 101-110 | £145 | £140 | £150 | £145 |
| G | 111-130 | £165 | £140 | £170 | £145 |
| H | 131-150 | £205 | £140 | £210 | £145 |
| I | 151-170 | £515 | £140 | £530 | £145 |
| J | 171-190 | £830 | £140 | £855 | £145 |
| K | 191-225 | £1,240 | £140 | £1,280 | £145 |
| L | 226-255 | £1,760 | £140 | £1,815 | £145 |
| M | Over 255 | £2,070 | £140 | £2,135 | £145 |
Vehicles more than 40 years old
Vehicles that are over 40 years old are often tax exempt, though this will depend on how they are used. This is excellent news for most classic vehicle drivers. Deemed ‘historic vehicles’, the existing regulations cover cars that were built before 1st January 1979. If you don’t know the date your car was built but it was registered between 1st and 7th January 1979, then it will also be exempt from MOT and tax.
Even if your car falls into this category, you must apply for vehicle tax exemption in order to stop paying tax. Information on how to do this can be found via the government website.
The rules on taxing a new diesel car
Diesel cars are taxed differently to other vehicles. Before they are sold, Euro 6 diesel cars have to pass the on-road ‘Real Driving Emissions’ (RDE) test, first introduced in September 2017. From January 2020, RDE2 will also be enforced and is likely to affect diesel car tax. Vehicles that are registered after 1st April 2018 and are not approved by RDE2 will be placed one band higher in the table for the first year rate.
Does the value of the car make a difference?
The value of a car can change your DVLA tax rate. If your car or motorhome is worth more than £40,000, then you will have to pay £320 per year in tax. The vehicle’s ‘list price’ – the published price prior to discounts – must exceed £40,000 to qualify for this.
This tax will be paid for five years from the second time the vehicle is taxed.
Other common questions about car tax in the UK
How will I know if my car has been taxed?
You can find out if a vehicle has been taxed by visiting the government website and checking for car tax by registration number. You can also see if your car has been registered as off the road.
How does car tax differ from road tax?
‘Car tax’ and ‘road tax’ are the same – the terms can be used interchangeably. However, in the UK road tax is more of an archaic term that is not technically correct anymore.
Do I need to display a DVLA tax disc?
The UK phased out tax discs in 2014, so you are no longer required to display them.
Can I transfer my existing tax to another vehicle?
Since 2014, car tax cannot be transferred between two vehicles.
What happens if I’m late paying my car tax?
If the DVLA does not receive your payment due to insufficient funds, you’ll receive an email informing you of this. The DVLA will then try and take the payment again after four working days. If this fails, you will receive another email stating that your vehicle is no longer taxed.
If the Direct Debit used to pay your tax is cancelled, you will be required to tax your car using a vehicle log book (V5C) and set up a new payment method.
How do I cancel my car tax?
In order to cancel your vehicle tax, you must inform the DVLA if your car has been sold or given to someone else, written off, scrapped, stolen, exported out of the UK, registered as exempt or declared as SORN. Again, the government provides specific information on cancelling car tax and applying for a refund.
Note: The information in this blog is subject to change, but was correct at the time of writing on Thursday 20th February. Please check gov.uk for any updates relating to your situation.